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The flag of New Zealand is a defaced Blue Ensign with the Union Jack in the canton, and four red stars with white borders to the right. The stars represent the constellation of Crux, the Southern Cross, as seen from New Zealand.
The colour makeup of the stars (which represent the points of the southern cross) reflects that of the Union Jack. Red interior with white borders on a blue background. If you refer back to the maritime origins of the New Zealand flag you will see that this has invariably been the case. Prior to the current flag, there was a flag that included the letters New Zealand in the bottom right hand corner (no stars); these letters were also in red with a white border. Additionally, a prior 'signalling' flag consisted of four red stars on a white disc.
The stars of the Southern Cross emphasise the country's location in the South Pacific Ocean. The Union Flag gives recognition to their historical foundations and the fact that New Zealand was once a British colony and dominion.